Joint Study From Network Strategy Partners and Atrica Makes a Compelling Business Case for Optical Ethernet

Business Wire, Feb 25, 2002

Business Editors & High-Tech Writers

SANTA CLARA, Calif. & BOSTON--(BUSINESS WIRE)--Feb. 25, 2002

Detailed Financial Model Finds Sustainable ROI

of 400% for Carriers Using Optical Ethernet

Network Strategy Partners, management consultants to the networking industry, and Atrica Inc., poised to be the leading provider of Optical Ethernet equipment for the $15 billion Metro networking market, today announced the results of an in-depth financial study that demonstrates the significant cost benefits of Optical Ethernet for Metro network service providers. Most notable is the study's finding that carriers deploying an Optical Ethernet Metro network infrastructure can realize dramatically improved cashflow and profitability, with payback in as little as two quarters, as compared to the two and one-half years it would take to realize payback with an Ethernet/DWDM alternative, and three and one-half years with next-generation SONET equipment.

The study also found that carriers can achieve a sustainable return on investment of 400% and that the total cost of ownership for an Optical Ethernet solution is 42% less than an Ethernet/DWDM alternative and 51% less than a next-generation SONET solution.

Conducted by Network Strategy Partners and sponsored by Atrica, the study presents a business case for the deployment of a suite of Optical Ethernet-based services including Internet access, Transparent LAN services, TDM services, Metro Ethernet private line services and custom dedicated private network services, in a large Metro area. By taking a census of enterprise establishments including MTUs, medium-sized stand-alone sites, and large sites such as corporate campuses and data centers, then defining service suites and pricing, revenue projections, total cost of ownership and finally, ROI, cash-flow and expenses, the study shows the significant cost reduction and resulting rapid growth in service revenues achieved with an Optical Ethernet network.

"This study illustrates the clear advantages Optical Ethernet holds over competing Metro technologies in terms of both initial capital expenditures and, more importantly, ongoing operational costs," said Michael Kennedy of Network Strategy Partners. "The business case for Optical Ethernet is so compelling that carriers would be hard-pressed to find a better foundation on which to build their next-generation Metro networks."

A white paper containing major findings of the study is available on Atrica's web site (www.atrica.com).

About Network Strategy Partners

Network Strategy Partners, LLC (NSP) helps enterprises, service providers, and equipment vendors, make strategic decisions, mitigate risk and affect change through business and technology consulting engagements. NSP's approach is tailored to each client's specific issues, objectives and budget. NSP's consultants are respected thought-leaders in the networking industry and influence its direction though confidential engagements for industry leaders and through public appearances and trade magazine articles. These interactions assure NSP's clients that they will be among the first to know the latest industry concepts and emerging technology trends. NSP's consultants combine advanced academic degrees with practical business experience. Contact NSP at www.nspllc.com.

About Atrica

Atrica's mission is to deliver the most cost-effective, high-performance Optical Ethernet platforms to forward-thinking service providers who are building next-generation Metro networks today. Atrica is a privately held company based in Santa Clara, California, with R&D facilities in Israel and business development and sales offices throughout Europe and Asia Pacific. The company has received a total of $117 million in funding to date, including seed funding from 3Com Corporation, first round financing from prominent Silicon Valley venture funds Accel Partners and Benchmark Capital, second round financing from five leading global service providers and a third round led by St. Paul Venture Capital. For more information, visit Atrica on the Web at www.atrica.com.